China’s New-Energy Vehicle Quotas Rattle European Automakers
An industry group is urging the Chinese government to give foreign automakers more time to comply with Beijing’s production goals for electric vehicles, which take effect this month.
An auto group representative with the European Union Chamber of Commerce in China called the government’s goals for new-energy vehicles “challenging” to meet. “As far as I know, all the foreign companies are working very hard to comply with the policy,” the representative said Thursday.
The European Chamber represents European businesses in China, including many of the continent’s automakers.
Under the current auto policy issued in September 2017, foreign automakers have to ensure that new-energy vehicles, or NEVs, make up a specific proportion of the cars they produce. The requirement takes effect this month.
The quota policy is widely seen as a more market-based way for the Chinese government to continue to promote new-energy vehicles — or those that run on electric, hybrid-electric and fuel-cell technologies. The government has also employed financial incentives to promote the industry, but the current subsidy program, which helped China become the world’s largest market for electric cars, will end in 2020.
Under the current of policy, which is essentially a cap-and-trade system, any automaker that produces at least 30,000 vehicles will be required to obtain “new-energy vehicle credits” that amount to at least 10% of its total annual vehicle production. The automaker can earn credits by producing new-energy vehicles, though not at a 1:1 ratio. Depending on the type, the automaker can earn more than one credit for each vehicle it manufactures.
An automaker that earns more credits than it needs can then sell excess credits to automakers that have failed to meet their own quotas.
Some analysts estimate that new-energy vehicles would have to make up 4% to 5% of an automaker’s fleet for it to meet the current 10% requirement. And that percentage is scheduled to rise to 12% in 2020.
However, the government is already working on the next phase of requirements that will cover 2021 to 2023. It is this phase that the European Chamber is particularly worried about.
“From the industry perspective, even minor adjustments to the NEV credit system beyond 2020 will necessitate huge changes to enterprises’ R&D and production,” it said in a work report on Thursday.
The European Chamber has urged the government to consult more with foreign companies before any policy changes and give them more time to prepare.
“The European Chamber fully supports China’s ambition to create a better environment; however, industry players require sufficient lead time in order to make meaningful contributions,” said Mats Harborn, the organization’s president.
Some foreign carmakers wasted little time meeting the government’s quota policy. In May, Volkswagen Group announced that it would open three new factories in China with its Chinese partner FAW Group Corp. The German carmaker aims to deliver up to 1.5 million new-energy vehicles to the market annually by 2025.
In addition, Daimler AG, which earlier that year announced that it planned to invest nearly $2 billion to set up a factory in China to manufacture Mercedes-Benz cars, including NEVs.
Contact reporter Mo Yelin (firstname.lastname@example.org)
Apr 19 23:01
Apr 19 18:07
Apr 19 17:18
Apr 19 15:49
Apr 19 14:47
Apr 19 12:01
Apr 19 11:31
Apr 19 02:45
Apr 18 17:03
Apr 18 12:54
Apr 18 10:19
Apr 18 03:26
Apr 18 02:59
Apr 18 02:21
Apr 18 02:32
- 1MSCI Postpones China Index Transition for Nearly Six Months
- 2Incident in Shandong Pharmaceutical Plant Kills 10
- 3JD Logistics Might Go Bust in Two Years if Losses Continue, Founder Says
- 4Jack Ma and Richard Liu Voice Support for Intense ‘996’ Work Culture – and People Are Not Happy About It
- 5‘Avengers: Endgame’ Has Made 400 Million Yuan in China – And It’s Not Even Out Yet
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas